Question

Question Which of the following statements is false? A. In a like-kind exchange under IRC§1031, the...

Question Which of the following statements is false?

A. In a like-kind exchange under IRC§1031, the assumption or payoff of liabilities by one party to the exchange results in boot received by the other party.

B. If boot is received in a §1031 like-kind exchange and gain is recognized, the following formula correctly calculates the basis of the like-kind property received: the fair market value of like-kind property received, less any gain NOT recognized (less deferred or postponed gain).

C. The receipt of cash, the relief from debt, or receipt on non-like-kind property by a party to a IRC§1031 exchange is colloquially referred to by tax practitioners as "boot." The amount of boot received sets the ceiling on the amount of gain that is recognized for tax purposes.

D. The taxpayer who assumes a liability in a §1031 like-kind exchange receives boot in the amount of the liability and may recognize gain up to that amount.

E. Only A & C are true.

Homework Answers

Answer #1

Statement E is False.

IRC Section 1031, a properly structured 1031 exchange allows an investor to sell a property, to reinvest the proceeds in a new property and to defer all capital gain taxes.

IRC Section 1031 (a)(1) states:

“No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment, if such real property is exchanged solely for real property of like-kind which is to be held either for productive use in a trade or business or for investment.”

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Question Which of the following statements is false? A. In a like-kind exchange under IRC§1031, the...
Question Which of the following statements is false? A. In a like-kind exchange under IRC§1031, the assumption or payoff of liabilities by one party to the exchange results in boot received by the other party. B. If boot is received in a §1031 like-kind exchange and gain is recognized, the following formula correctly calculates the basis of the like-kind property received: the fair market value of like-kind property received, less any gain NOT recognized (less deferred or postponed gain). C....
2019-Carey exchanges land for other land in a qualifying like-kind exchange. Carey's basis in the land...
2019-Carey exchanges land for other land in a qualifying like-kind exchange. Carey's basis in the land given up is $115,000, and the property has a fair market value of $150,000. In exchange for her property, Carey receives land with a fair market value of $100,000 and cash of $10,000. In addition, the other party to the exchange assumes a mortgage loan on Carey's property of $40,000. a.Calculate Carey's recognized gain, if any, on the exchange__________ Feedback Although a taxpayer realizes...
Sammy exchanges land used in his business in a like-kind exchange. The property exchanged is as...
Sammy exchanges land used in his business in a like-kind exchange. The property exchanged is as follows: Property Surrendered Adj. Basis FMV Land $ 44,000 $ 60,000 Cash Liability on land $ 12,000 $ 12,000 The other party assumes the liability. Property Received Adj. Basis FMV $ 50,000 $ 43,000 $ 5,000 $ 5,000 a. What is Sammy's recognized gain or loss? b. What is Sammy's basis for the assets he received?
1. For the following like-kind exchange transactions, determine: The amount of realized gain or loss The...
1. For the following like-kind exchange transactions, determine: The amount of realized gain or loss The amount of recognized gain or loss The basis of the land received Basis of Land Exchanged FMV of Boot Received FMV of Land Received $225,000 $-0- $500,000 $465,000 $140,000 $550,000 $675,000 $350,000 $700,000 $800,000 $250,000 $600,000 $1,000,000 $125,000 $750,000
Sam exchanges real estate for other real estate in a qualifying like-kind exchange. Sam’s basis in...
Sam exchanges real estate for other real estate in a qualifying like-kind exchange. Sam’s basis in the real estate given up is $120,000, and the property has a fair market value of $165,000. In exchange for his property, Sam receives real estate with a fair market value of $100,000 and cash of $15,000. In addition, the other party to the exchange assumes a mortgage loan on Sam’s property of $50,000. What is Sam's recognized gain, if any, on the exchange?...
a taxpayer exchanges real property in which his basis was $100,000 for like kind property worth...
a taxpayer exchanges real property in which his basis was $100,000 for like kind property worth $80,000 plus $40000 in cash, what amount of gain is recognized?
If a taxpayer has recognized gain on an exchange of like-kind property held for investment use,...
If a taxpayer has recognized gain on an exchange of like-kind property held for investment use, where is the gain reported? A. First on Schedule D, then carried to Form 8824. B. First on Form 8824, then carried to Schedule D. C. First on Form 4797, then carried to Form 8824. D. First on Form 8824, then carried to Form 4797.
Indicate whether each of the following is either: A True B False 1) An S Corporation...
Indicate whether each of the following is either: A True B False 1) An S Corporation is a taxpaying entity. 2) If shareholders elect S Corporation status, the corporation generally pays no tax. 3) Stock received by a transferor in exchange for services does not count in determining whether the 80% control test has been met. 4) Under Sec. 351, no gain or loss is recognized by those who exchange property solely for stock of the recipient corporation. 5) When...
Which of the following statements is false? a. The holding period of property received in a...
Which of the following statements is false? a. The holding period of property received in a like-kind exchange generally includes (tacks) the holding period of the property given up in the exchange. b. A lease cancellation payment received by a lessor is generally treated as an exchange of a capital asset. c. Personal use assets do not qualify as "like-kind" and therefore may result in taxable gain if exchanged. d. Trade accounts receivable generally are not capital assets.
All of the following conditions would encourage a taxpayer to avoid like-kind exchange treatment on the...
All of the following conditions would encourage a taxpayer to avoid like-kind exchange treatment on the disposition of an otherwise qulifying asset except: A) the availabilty of net operating loss carryovers B) a realized loss on the asset disposed of. C) the disposition od a capital gain asset when the taxpayer has a capital loss carryover. D) expected lower tax rates in the future
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT